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The Couponcare Swindle

In an effort to defend the unpopular House Republican budget, conservatives have been insisting their vision for a new Medicare isn’t as radical as it sounds. Yes, the House Budget would eliminate the traditional government insurance program for seniors who retire starting in 2002, replacing it with a fixed subsidy that these seniors would use to purchase private insurance. But, conservatives insist, the new program would really be no different from some well-known universal health schemes that even liberals like.

House Speaker John Boehner, for example, has likened the House Republican proposal to the system that will be in place once the Affordable Care Act takes full effect. And today, in the New York TimesDavid Brooks suggests another analogue: The House Republican version of Medicare, he says, would simply be a “different version” of the universal coverage scheme developed by the Netherlands.

Can we please put this argument to rest? It’s true that all of these systems have (or would have) regulated marketplaces from which people choose (or would choose) private, partially subsidized insurance plans. But that’s really where the similarities end. Among the most crucial and obvious differences is money. And it's far from a minor thing.

The Affordable Care Act will guarantee access to a level of benefits and, for the poor and most of the middle class, it will limit what individuals can spend on premiums and out of pocket expenses. The Dutch system already does the same thing for the people who live in the Netherlands, only it does so (much) more generously.

Compare this to the Republican proposal for Medicare, which critics have rightfully started calling "Couponcare." The government's contribution towards insurance would rise far more slowly than the cost of health care. It would not guarantee a fixed set of benefits or protection from individual expenses. Only the very poor would get extra financial assistance and, according to a Kaiser Family Foundation briefing paper, even that assistance would likely be inadequate for many (possibly most) of the people receiving it. 

This distinction is entirely intentional. It’s why the Republican budget, on paper, seems to save so much taxpayer money in the long run. But the effects on individuals would be devastating, as the Congressional Budget Office noted in its assessment. By 2030, the average senior would be individually responsible for about two-thirds of his or her medical costs. Even with heroic assumptions about the ability of consumers to reduce prices through active shopping, it’s impossible to imagine that scheme not leaving many seniors with punishing health care costs.

Saying the Republican Medicare proposal is a variation on the Affordable Care Act or Dutch national health insurance is a bit like saying that a bicycle is a variation on the 747. Sure, you can get across the country on either one. But opt for the former and you will struggle mightily. You might even die on the way.